China Vanke Co. and Poly Real Estate Group Co., the
nation’s biggest developers, slumped at least 2 percent after
Beijing increased the minimum downpayment on purchases of second
homes. Air China Ltd. and China Southern Airlines Co. paced
declines for carriers on speculation flu deaths may deter people
from traveling. Shijiazhuang Yiling Pharmaceutical Co., whose
drugs the government said may combat the virus, jumped 10
percent, leading gains for health-care stocks.

The Shanghai Composite Index slid 0.6 percent to 2,211.59
at the close, the lowest level since Dec. 27. The CSI 300 Index
fell 0.5 percent to 2,472.30. The Hang Seng China Enterprise
Index added 0.5 percent after plunging 3.1 percent on April 5.
Mainland markets were shut April 4 and 5 for the Tomb-sweeping
day holiday.

“There are worries about the bird flu that haven’t been
reflected in the markets because we were closed for the
holidays,” said Mao Sheng, an analyst for Huaxi Securities Co.
in Chengdu. “There’s no real big driver to push stocks much
higher in the near term.”

The Shanghai index has slumped 9.2 percent from a Feb. 6
high amid concern steps to cool property prices will drag on
economic growth and as company earnings trailed estimates.
Valuations on the gauge have sank to 9.1 times projected 12-month earnings, the lowest level since Dec. 13 and less than the
seven-year average of 15.8, data compiled by Bloomberg show.

Bird Flu

The Shanghai gauge’s trading volume was 20 percent lower
than the 30-day average today, while its 100-day volatility was
near the one-year high of 20 set on March 28, according to data
compiled by Bloomberg.

Air China, the largest international carrier, lost 3.4
percent to 5.15 yuan. China Southern Airlines, the biggest
domestic carrier, dropped 2.6 percent to 3.44 yuan.

China reported three more cases of the deadly H7N9 strain,
bringing the total number of infections to 21. The virus has
already killed six people. The uncertainty of the flu may drag
on the market, Citigroup Inc. analysts Minggao Shen and Ben Wei
wrote in a report today. The impact from the virus may hurt
airlines, insurance, consumer staples and retail stocks while
boosting health-care and auto shares, according to the report.

Property Measures

Beijing increased the minimum downpayment on second home
purchases to 70 percent for buyers who apply for loans from the
housing provident fund, according to a statement posted on the
fund management agency’s website today. China needs to impose a
tax on existing properties to ease the impact of unequal wealth
distribution after rapid growth in property prices, the China
Securities Journal said in a commentary today.

China’s largest cities, including Beijing and Shanghai,
restricted multiple home purchases this month after policy
makers asked local governments to step up efforts to cool the
property market. Retail sales growth in the January to February
period was the slowest since 2004, while manufacturing expanded
less than economists forecast in March.

Consumer prices probably rose 2.5 percent in March from a
year earlier, compared with a gain of 3.2 percent in February,
according to the median estimate of 27 economist forecasts
compiled by Bloomberg. Exports may have climbed 11.7 percent
last month from a year ago, another survey showed. The CPI data
are scheduled for tomorrow while trade data will be released on
April 10.

The Bloomberg China-US Equity Index of the most-traded
Chinese companies in the U.S. retreated 1.7 percent on April 5.
The iShares FTSE China 25 Index Fund, the largest Chinese
exchange-traded fund in the U.S., slid 0.9 percent to the lowest
level since Oct. 10.